US energy storage thrives amid political, market uncertainty

A webinar hosted by CESA and the US government-funded Energy Storage Technology Advancement Partnership (ESTAP), discussed the state of the US energy storage industry in 2024 and what to expect in 2025.  

In November, US energy storage capacity had surpassed 25 GW. Though deployment had begun scaling rapidly in 2021, it took off significantly in 2022 and 2023. 

“Standalone energy storage became eligible for the investment tax credit in January 2023,” said Todd Olinsky-Paul, a senior project director at CESA, noting the ITC and state-level policies likely spurred the spike in deployment. 

The IRA-based 30%  tax credit has been “fundamental” to the storage industry’s growth, said Joan White, director of storage and interconnection policy at the Solar Energy Industry Association trade body. 

“We’ve seen year-over-year growth in the range of 80% to 85% in storage over the last two years,” she said. “It’s no surprise that there have been efforts to repeal certain provisions of the IRA, including the standalone storage tax credit, to support and balance the budget. We don’t need to convince everyone it’s worth keeping but we do need to convince some key Republican allies.”

President Trump’s rapidly changing trade policy has caused uncertainty. A new, additional 10% tariff on Chinese goods and an in-process antidumping and countervailing duty (AD/CVD) suit by American energy storage manufacturers could further disrupt supply chains. 

The United States International Trade Commission and Department of Commerce this week announced they will move forward with AD/CVD investigations into certain Chinese battery components. If countervailing duties are imposed, White said, “We could see tariffs up to 800% to 900% on active anode materials, which would have dramatic impacts on the electric vehicle and [energy] storage industries.”

Concerns over China’s dominance of battery manufacturing are growing. 

“They have a massive overcapacity problem and that becomes a problem for us in the United States as we try to build that capacity domestically,” said Jim Greenberger, executive director of NAATBatt, formerly the National Alliance for Advanced Transportation Batteries. “As long as they keep their factories running, it will undercut efforts to build a domestic US supply chain.” 

Data centers

AI and its associated data centers are driving new demand for energy storage, particularly as artificial intelligence-driven energy demand fluctuates significantly throughout the day. 

“By 2028, the electricity demand from AI data centers could account for 12% of the total US electricity demand, or roughly equal to all the electricity produced by renewable sources connected to the grid today,” said Greenberger. “Storage will be essential to balance the energy load.” 

Russ Weed, president of Seattle-based consultant CleanTech Strategies, expects the industry to adopt financing models that can provide revenue stability. “Tolling agreements have long been used for natural gas power plants and now we’re seeing them emerge for energy storage as a way to guarantee revenue,” he said. 

The CESA-ESTAP webinar included a discussion of US state-level energy storage policy frameworks and updates to fire code language around energy storage, following the Moss Landing battery fire in California last month.

From pv magazine USA.